UK retailers hit with profit warnings

Last week it was Marks & Spencer who was downgraded by Barclays. The week before it was the doom of Brexit that is expected to devalue a plethora of retailers. So far this quarter 66 companies have issued profit warnings according to accounting company EY. This is nearly 20 percent up from the same period in 2015.

According to EY, 11 percent of the warnings relate to the EU referendum, with companies primarily citing the impact of uncertainty on demand, and the weaker pound. The accountancy firm further stated over 40 percent of companies who warned in the first half of 2016 have warned in the previous 12 months, underlining the increasing polarisation between winners and losers in this recovery.

There have been 321 warnings in the year-to-date from 17.4 percent of UK quoted companies compared to 297 from 18.5 percent of companies at the same point in 2015. Seven profit warnings, 11 percent of the total, cited ‘BREXIT’ in Q2, with most referring to the impact of uncertainty on demand, and the weaker pound.

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